Colorectal cancer is the second leading cause of cancer-related deaths in the United States with 112,000 new cases diagnosed per year and approximately 52,000 deaths estimated in 2007. Dysregulation of Akt and protein kinase C (PKC) contributes to tumorigenesis by promoting cell proliferation and inhibiting apoptosis. The signaling activation process of Akt and PKC has been studied in great detail. However, little is known about how the signals are turned off once activated. Recently, we have identified a family of novel protein phosphatases, PHLPP (PH domain Leucine-rich-repeats Protein Phosphatase) that directly dephosphorylates Akt and PKC. However, the role of PHLPP in cancer has not been defined. In the preliminary studies, we found that loss of PHLPP expression occurs with high frequency in human colorectal cancer specimens. Furthermore, our studies have suggested that PHLPP plays a role in regulating cell polarity. In light of our findings, the central hypothesis driving this proposal is that PHLPP serves as a tumor suppressor by regulating cell polarity in addition to its ability of turning off the growth signaling activated by Akt and PKC. The long-term goal of our studies is to better understand the physiological role of PHLPP and its contribution to colon cancer development and progression in vivo. The Specific Aims are: Aim 1: To define the molecular mechanism of PHLPP downregulation. The goal of this aim is to investigate the potential mechanism leading to PHLPP downregulation in cancer. We will test the hypothesis that the expression level of PHLPP is controlled by the ubiquitin proteasome pathway in cells, and preventing PHLPP degradation leads to upregulation of the protein. Aim 2: To determine the role PHLPP in maintaining cell polarity. We hypothesize that PHLPP exerts its function as a tumor suppressor by regulating cell polarity and cell growth. The functional effect of PHLPP on establishing epithelial cell polarity will be determined. To elucidate the underlying mechanism, we will test the hypothesis that PHLPP is required for epithelial junction formation by modulating PKC activity via binding to the polarity protein Scribble. Aim 3: To delineate the role of PHLPP in tumorigenesis in vivo. The hypothesis driving this aim is that loss of PHLPP expression contributes to the initiation and progression of colorectal tumors. We will address the question whether there is an increase of tumor incidence when PHLPP is knocked out, both basally and in combination with other carcinogenic factors. Furthermore, we will assess the contribution of altered cell polarity in normal development of gut epithelium and tumor initiation using the knockout mice.